NRI Investment tips after migration from India
Are you planning on a move overseas? Don’t forget to change your residential and financial status before leaving the country. It’s essential to understand how NRI investments in India work.
Let’s see how you can manage NRI investments after immigration.
- Convert your accounts
Convert your Savings Account to a Non-Resident Ordinary (NRO) Rupee Account. NRIs are permitted to deposit income earned in India such as rent, dividend, etc., into their NRO Account. The funds in this account are non-repatriable and taxable.
Another option is the Non-Resident External (NRE) Rupee Account. NRIs can transfer funds from overseas in foreign currency. Since this is a rupee account, this account can be used to pay expenses in India. The benefit of this account is that the funds in the account are entirely repatriable with no tax liability. NRI investments in India can be carried out through this account.
- Clear your debt
Before you leave the country, it’s essential to clear all your short-term debt such as Credit Card payments, short term Personal Loans etc. You should surrender all your Credit Cards.
- Set up a PIS Account
A portfolio investment scheme (PIS) account has been introduced by the RBI to enable any NRI investments after migration in the Indian stock markets. An NRI can open a PIS account with an RBI authorised dealer for purchase and sale of shares. The NRI can only transact through a PIS account. Banks like HDFC Bank provide this facility to their NRI customers.
In case of an endowment insurance plan, you can continue the policy and set up an auto debit through your bank account so that there is no hindrance in the payment of premiums. Conversely, for a term insurance plan, you can continue with it if your insurer provides the facility of transfer to the place of migration. If such provision is not there, it’s better to surrender the policy in India.
If you have health insurance, it is best to surrender your policy in India and buy a new policy in your country of residence because every country has different medical rules and regulations.
- Securing your investments:
It is essential to handle NRI finances after migration. All your financial assets should include a nominee if anything should happen to you. Secondly, to carry out any transactions in India, it is vital to create a power of attorney with either a family member or a trustworthy individual.
If you have a PPF (Public Provident Fund) Account, you cannot continue to deposit funds in it from the date of becoming an NRI. The account will continue to earn an interest rate similar to that of a post office savings account. At maturity, the PPF account needs to be redeemed.
Be sure to clear all your tax liabilities and due before migrating overseas. Additionally, you could also inquire about the Double Taxation Avoidance Agreement (DTAA) -- whether the country of migration has an agreement with India. This ensures that there is no double taxation on income earned in your country of residence and taxes are paid in both countries.
These are a few aspects to keep in mind for NRI investments in India when you plan on moving abroad.
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* Terms and conditios apply. The information provided in this article is generic in nature and for informational purposes only.